I tried solving for a by squaring both sides but the equation turns out to be biquadratic which is out of my syllabus right now. What I think is about the use of inverse function and quadratic equations, but I am unable to apply these to solve. The answer to the problem is a ∈ $(-1/4,0)$
The below cited answer gives some hint to what I want to do
Aqua (https://math.stackexchange.com/users/463553/aqua), prove that for $-1/4 < a < 0$, the equation $\sqrt{a + \sqrt{x+a}} = x$ has exactly 2 solutions one of which is $(1+\sqrt{4a+1})/2$., URL (version: 2018-08-24): https://math.stackexchange.com/q/2893448
Fig. 1.: Curves of $f_a$ in red, $f_a^{-1}$ in blue, symmetrical with respect to bissecting line $y=x$ with from left to right $0,1,2,1$ common points. These curves are half-parabolas. This graphical representation shows how narrow is the range of values of $a$ for which there are 2 common points to these curves.
Let $$f_a(x)=y=\sqrt{x+a}\tag{1}$$
whose inverse function is $y=f_a^{-1}(x)=x^2-a\tag{2}$
(see figure 1).
Your issue
$$\text{There exists exactly 2 values of x such that } \ \sqrt{\sqrt{x+a}+a}=x$$
can be written as
$$\text{There exists exactly 2 values of x such that } \ f_a(\underbrace{f_a(x)}_{y \ge 0})=x\tag{3}$$
Besides,
$$f_a^{-1}(f_a(x))=x\tag{4}$$
Comparison between (3) and (4) amounts to say that:
$$\text{There exists exactly 2 (positive) values of y such that } \ f_a^{-1}(y)=f_a(y)\tag{5}$$
It is not our interest to work with equation (5) which gives a fourth degree equation.
An essential remark is that (5) is possible if and only if
$$ f_a^{-1}(y)=f_a(y) \color{red}{=y}\tag{6}$$
Indeed, when the curves associated to $f$ and $f^{-1}$ share a common point, this point belongs as well to the line bissector with equation $y=x$ (see figure 1).
(6) gives rise to a quadratic equation (only!)
$$x^2-a=x \ \iff \ x^2-x-a=0 \tag{7}$$
(we have switched back to variable $x$).
Condition "having 2 positive roots" for equation (7) is equivalent to the fact that the discriminant of (7) is positive and that moreover its smallest root is positive:
(Check on fig. 1: the third case $a=-0.1$ is the only one with 2 intersection points).